Suspicious Jeonse Fraud Transactions, 106 Cases Including 'Villa Wang' Referred for Investigation

Concentration in Seoul and Metropolitan Area... 31 Suspicious Transactions in Gangseo-gu
Estimated Damage Scale 17.1 Billion Won... More Than Half of Victims Are 2030 Youth

On the afternoon of the 18th, at a meeting between related agencies held at Michuhol District Office in Incheon to eradicate jeonse fraud, Won Hee-ryong, Minister of Land, Infrastructure and Transport, is seen speaking.
[Image source=Yonhap News]

[Asia Economy Reporter Cha Wanyong] #. In their 40s, rental business operators A, B, and C purchased multiple villas in Seoul using a method called "empty shell jeonse," where they received jeonse deposits without their own capital and paid the balance. When it became difficult to return the deposits, they sold all the villas on paper to a corporation that existed only on documents and then disappeared.

An investigation is set to intensify into suspicious jeonse fraud transactions, including those involving the so-called "Villa King," who rented out over 1,000 villas and officetels in the metropolitan area and caused damage to many tenants before passing away.

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 20th that among 687 damage consultation cases received by the Jeonse Damage Support Center from September 28 to November this year, 106 cases suspected of involving multiple victims or collusion were selected in the first round and referred to the National Police Agency for investigation. The remaining cases not included this time will also undergo in-depth investigation and analysis for additional referrals.

Notably, among the 16 cases included in this first referral are those related to the Villa King, who owned about 1,000 houses and caused damage to many tenants before his death.

MOLIT stated that although the landlord has passed away, it will provide the police with related materials such as consultation logs and investigation and analysis results upon receiving damage reports to enable swift investigation of the entire crime, including any collusive organizations.

Considering that investigations by the police into the entire crime, including collusive organizations, are ongoing regardless of the landlord's death, MOLIT plans to provide investigation and analysis data along with consultation logs and related materials to investigative agencies upon receiving damage reports.

Among the 106 suspected jeonse fraud transactions referred for investigation, 10 corporations and 42 suspects were identified. The largest group was landlords with 25 individuals, followed by licensed real estate agents (6), landlord-cum-real estate agents (4), recruiters (4), and building owners (3). By age, those in their 40s accounted for the majority with 18 suspects (42.9%), followed by 50s with 10 (23.8%) and 30s with 8 (19.0%).

By transaction area, suspected jeonse fraud cases were most numerous in Seoul with 56 cases (52.8%), followed by Incheon with 37 (34.9%) and Gyeonggi with 12 (11.3%). Within Seoul districts, the breakdown was ▲Gangseo-gu 31 cases ▲Yangcheon-gu 8 cases ▲Geumcheon, Gwanak, and Guro-gu each with 3 cases.

The estimated damage amount from suspected jeonse fraud transactions exceeds 17.1 billion KRW. Victims were mainly in their 20s and 30s, with 54 individuals (50.9%) in their 30s and 19 (17.9%) in their 20s. Victims in their 40s (12 people, 11.3%) and 50s (7 people, 6.6%) were also recorded.

Among the detected suspected jeonse fraud transactions, there were cases where licensed real estate agents exchanged properties to embezzle deposits. H and I, both licensed real estate agents and landlords, inflated sales prices when brokering their respective properties and signed jeonse lease contracts where the deposit exceeded the sales price, thus embezzling the deposits. Multiple recruiters acting on behalf of landlord J were found to have systematically embezzled deposits by paying commissions with jeonse deposits upon successful lease contracts and purchasing multiple houses.

MOLIT plans to reorganize the existing "Real Estate Transaction Analysis Planning Team" into the "Real Estate Consumer Protection Planning Team" on the 27th of this month to strengthen real estate consumer protection functions. The planning team will enhance monitoring and crackdowns at all stages of real estate transactions to prevent damages caused by increasing market disturbances such as jeonse fraud and housing price collusion.

At the listing stage, false listings and housing price collusion will be monitored; at the registration stage, cases of unregistered transactions after real estate transaction reports will be investigated to crack down on false transactions; and at the lease stage, illegal activities such as jeonse fraud will be investigated. Additionally, ongoing investigations into foreign real estate speculation and unusual direct transactions of high- and low-priced apartments will continue, along with investigations into planned real estate projects and illegal resale, which cause significant consumer damage.

Nam Youngwoo, Director of Land Policy at MOLIT, said, "In addition to the ongoing crackdown on jeonse fraud, we plan to accelerate efforts to prevent future jeonse fraud through analysis of housing sales and lease transaction information and continuous monitoring. With the launch of the Real Estate Consumer Protection Planning Team, we will do our utmost to minimize consumer damage from various illegal activities and crimes that may occur at all stages of real estate transactions."

Meanwhile, MOLIT will announce the results of a government-wide special crackdown on jeonse fraud in cooperation with the National Police Agency in February next year. Even after that, it plans to maintain close cooperation with the police by investigating and analyzing damage cases reported to the Jeonse Damage Support Center and referring cases for investigation every two months.

This content was produced with the assistance of AI translation services.